Friday, 31 March 2017

The technological changes
we are seeing in the world today are unprecedented. Never has technology been
more powerful, more available or cheaper than it is today and we are just at
the beginning. The projected growth of technology in the next two years is purported
to be as much as we have seen in the whole of history. This will have a greater
impact on the way we live and work than any of us can imagine.

Concurrent with this is an
ongoing concern about the impact of continuing skills shortages on business
which CEOs in New Zealand and globally see as a major concern. Both issues mean
it is vitally important to reassess the way we educate and the content of our
education. It is critical that as we build an increasingly complex economy in
our city and our region we have students at all levels being prepared in an
optimal way to participate in and across that economy.

The expectations of
education outcomes are changing markedly. Employers are looking for young New
Zealanders to be able to relate well to others, to be motivated and reliable, to
be resilient and enterprising, literate and numerate and to be informed
decision makers while being critical and creative thinkers. These attributes
are going to be increasingly important as we consider the dynamic future that
awaits young people.

Education, particularly at
a secondary school level, is not just about allowing young people to make
immediate choices that confront them at the end of school but is about ensuring
young people are equipped to consider their career paths throughout life. Their
career paths will markedly be influenced by changes in the workplace driven by
technology. It is legitimate to ask whether our education system will have the
ability to keep pace with the changes confronting us.

There are already robots
that are perfectly capable of doing background legal research for complex court
cases. There are robots that are much more accurate in their pathologicaldiagnosis than human
beings. We are seeing the beginnings right here in this city of autonomous
electric vehicles, with one being trialled at Christchurch International
Airport. Some are predicting that a simple cellphone will be as powerful as the
human brain within eight years.

The collection,
interpretation and use of data isincreasingexponentially
to the extent that already some of us are becoming concerned about who is
collecting it and what they are using it for.

I can recall in the 1970’s
when computer technology was just starting to ramp up that some of us thought
the requirement for employees would materially drop over time as computers took
over. That did not happen, but slowly and surely, workplace dynamics changed.
There are many things that cellphones and computers are doing now that use to
be done manually usitlising large numbers of people.

Opportunities for work will
continue. However, the work will be different. Employees will have strong
literacy language and numeracy skills and increasingly need skills of
communication and corporation, computation, computer mastery, creativity, and
critical thinking. Tomorrow’s employees will need to be able to think across
traditional disciplines make connections and solve problems. Already division
of labour is increasingly in teams rather than in hierarchy of command. The old
model of educated managers supervising the less educated workforce has gone. So
as we face our future we need to be putting much more emphasis on educating our
young people in new ways to embrace what is ahead of us. That is a significant
challenge for us all.

Tuesday, 21 March 2017

New Zealand is a country
blessed with copious quantities of fresh water. Recently some parts of our
country have had a lot more than they want, some a lot less. It is an extraordinarily
precious resource that must be cared for and used more wisely than it is being
used at present.

Historically water usage in
Canterbury, and in wider New Zealand, has been very opportunist. We have taken
water from wherever we can get it and have used it for whatever we wanted to
use it for. We have not had sufficient regard for the way it has been
extracted, the way we have treated it and the way we have returned it to the
environment. That is all changing. In my opinion 2017 will be the year that the
real issues about the sensible utilisation of water right across our
communities will begin to be understood and accepted.

In Canterbury almost all
the available fresh water passes through or under the Canterbury Plains and out
to sea. However, because of the way we have extracted water we have put
pressure on very vulnerable areas in our environment, both through creating
water shortages and through contaminating water systems in a way that is not
sustainable. We need to work out ways to maximise the economic benefit of fresh
water utilisation while concurrently protecting and continuously improving
water quality and availability.

To drive this change we
will inevitably need to harness existing and new technologies which are
becoming cheaper, more powerful, more available and more applicable every day.
Those technologies will be driven by far better data collection and analysis to
ensure we make the right decisions. We will need to ensure that we get
communities buying into the need for a different approach to water management.
This will reduce waste and inefficiency, allow flexibility and support the
development of infrastructure to ensure reliability of storage and water
supply. We will also need to demonstrate leadership with respect to how we make
better decisions with regards to water utilisation and how we facilitate
investment and longer term planning to ensure that we use available water equitably
and wisely.

The harvesting and
controlled distribution of large volumes of water along the east side of the
main divide will be critical in this regard. There have already been good
examples of water schemes that harvest and farm water. The Opuha Scheme in South Canterbury
is one, and more recently the Central Plains Water Scheme in North Canterbury
which not only takes excessive run of river water when it can but also uses
Lake Coleridge as a water sink to ensure reliability of supply. These schemes
can guarantee water supply when it is needed and also support and encourage the
amelioration of environment damage that has been done in the past.

The Canterbury Water
Management Strategy (CWMS) has been a good model to manage water allocation and
utilisation to date but it is just at its beginning. The important thing about the
CWMS model is that it relies on input from right across various participants in
our community, all of whom have different requirements for the protection
and/or utilisation of water. It relies heavily on reaching a consensus with
regards to how water is allocated. That inevitably involves compromise, an
appreciation to think strategically and agree on what is the best outcome for
the wider community.

Our future is not about
putting unreasonable restrictions on water utilisation. It is much more about
sourcing water from where we can and utilising it in a way that does not
involve environmental degradation. That is possible with use of good technology,
sensible water management structures, strategic thinking and good leadership.
We can do that in Canterbury and we can lead the way for others to follow.

Tuesday, 14 March 2017

Late last year I was
invited to attend an ASEAN conference in Manila to present to all ten ASEAN
countries lessons learned from the Christchurch earthquake from a business
perspective.

ASEAN countries are prone
to disasters of many types, including significant seismic activity, typhoons, hurricanes
and floods. Their preoccupation with recovery is very much related to how individuals
are protected in a post-disaster environment. My presentation in Manila was about
how we protected the corporate infrastructure of Christchurch post-earthquake
through various interventions with remarkable success.

The rationale for this
intervention from a social protection perspective (looking after the people) is
that by protecting the fabric of the companies you protect employment and therefore
ensure optimal outcomes for people in a post-disaster environment.

This was a foreign concept
for almost all the attendees at the ASEAN seminar in Manila. They were intrigued
to hear how the Government supported a wage subsidy post-earthquake which meant
that companies could maintain and protect employment relationships even though
their businesses were seriously compromised. I told them that our Government invested in
excess of $250 million into Christchurch companies by way of a wage subsidy
that was a lifeline for thousands of earthquake impacted companies. I also advised
them of the behavior of our banks in affording extra facilities to affected companies
and our insurance companies who in many instances provided part payment of
insurance settlements to ensure continuing cashflow and the IRD who delayed
payments on GST or provisional tax to ensure companies cashflows were optimised.
The big lesson was that it was all about maintaining cashflow in companies and
protecting employment relationships.

I was involved in some serious
questioning with respect to the affordability of such interventions. I was told
that it was all very well for a wealthy first world country to provide financial
support for its businesses but how could poorer economies afford to do this? My
response was to advise them that this was not a cost to Government but rather
an investment. The millions invested in protecting corporate structures in
Canterbury will have been repaid many times over through continuing PAYE
payments, GST payments as well as corporate tax payments. Of course, the Government
had far fewer people to pay the unemployment benefit to because people stayed
in work.

My message to these
communities was that this was a good way of protecting economic activity and
social outcomes post-disaster and should be seriously considered as a proven
disaster recovery mechanism.

The normal churn rate for
businesses in Christchurch (in other words those businesses that go out of business
every year for one reason or another) is around 11.4%. Since the earthquake, it
has been around 11.6%. A remarkable statistic when you consider that up to 30%
of our companies were predicted to collapse post-earthquake. Work done by the
IRD demonstrates that GST payments, PAYE payments and corporate tax payments have
continued to grow from immediately post-earthquake until today. Which is another
good sign of corporate health and payback to the public purse.

Recently I was approached
by the International Labour Organisation to present to another seminar in
Mongolia on exactly the same topic. What we did in Christchurch has increasing
interest in the Asia Pacific region. We should not underestimate the positive commercial
outcomes that occurred in Christchurch post-earthquake and the lessons the world
can learn from that. It is a great credit to all institutions involved, including
our Government, who saw the merits of protecting cashflows in a post disaster
environment as a means to optimise long term positive economic outcomes. It has
worked in Christchurch and it can work elsewhere.